The Pyramid of Corporate Social Responsibility: Review - Article Example

The Pyramid of Corporate Social Responsibility: Review al Affiliation Executives of firms usually have a hard time dealing with responsibilities of their corporation towards the society. Initially it had been argued that the sole purpose of firms was to ensure shareholders reap maximum profits. However, it was realized that firms had a role to play towards the society. The article being reviewed tries to explain the duties assigned to corporate bodies towards ensuring there’s a moral management system governing organizational stakeholders. The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders By Archie B. Carroll This article explores the nature of the Corporate Social Responsibility (CSR) based on a model explaining its components; ethical, economical, legal and philanthropic elements. This model incorporates the stakeholders in the firms while trying to reconcile the executives’ roles. It clearly discusses the ethical component of the CSR model raising three approaches to management; immoral, moral and amoral. Archie Carroll tries to talk about managing stakeholders in a moral fashion. Introduction The methodology that will be used involves framing a corporate social responsibility. Relating this idea to the stakeholders and isolating the moral and ethical components of corporates social responsibility also links it to ethical approaches to management. The three approaches being: immoral, moral and amoral ethical approaches (Caroll, 1991). To recognize social responsibility, the management should implement moral changes rather than focusing on the amoral or immoral changes. The article being reviewed is titled ‘The Pyramid of Corporate Social Responsibility: Toward the Moral management of Organizational Stakeholders’ (Caroll, 1991). This review is aimed at realizing the mode of social responsibility of corporate firms in understanding its constituent parts. It’s aimed at characterizing the firm’s social responsibility in ways useful to executives wishing to renew their role to their shareholders with those to other competitor groups claiming legitimacy. The article shows a comparison of the economic and legal components of corporate social responsibility. Previously, the Committee for Economic Development depicted the CSR by using the “three concentric circles”. The inner circle included basic economic functions say growth and products, the intermediate one suggested that the economic functions must be exercised with awareness of the dynamic social values and priorities while the outer circle outlined newly emerging responsibilities of the corporation to the society. Summary This review sums up the social responsibility of corporate firms. It tries to show a comparison of the economic and legal components in the social responsibilities of a corporate firm in ways useful to executives who wish to renew their role to their shareholders with those to other competing groups claiming legitimacy. To achieve this it employs a pyramid model with economic, legal, ethical and philanthropic components. When discussing the aspect of ethics with respect to management, it talks about three approaches; immoral management, moral management and amoral management. This pyramid model can be split into four categories each which aligns with the thesis of this review. Economic responsibilities – This is aimed at ensuring the institution is profitable to all surrounding it. As opposed to where initially it was all about making profit, nowadays certain responsibilities such as commitment, competiveness and efficacy of operation yielding to maximal reap of earnings per share to the shareholders has come about. Legal responsibilities – This aims at ensuring all activities comply with laws and regulations that have been set by the state and local government. Economic activities should fall within legal framework. A firm should ensure it meets legal obligations and that the executives and members associated with it comply with federal regulations. Ethical responsibilities – Norms/expectations of fairness, dignity and justice in activities carried out by the firm should be met. A good corporate citizenship is one where one does what is morally expected maintaining integrity while at the same time recognizing new norms that are preset and accepted by the modern society. Philanthropic responsibilities – The corporate involving itself in acts that promote human welfare/goodwill. Operations should meet charitable expectations of society within the local communities. They should involve themselves in projects that improve ‘the quality of life’ of the community. However, this is considered less important than the other three. The pyramid portrays economic performance as on top of the block. The weakness of this model is that though the components are treated as different entities, they’re not mutually exclusive. This makes traditionalists view this as a conflict between a firms ‘concern for society’ and its ‘concern for making profits.’ According to Friedman, management is ‘to make as much money as possible while conforming to the basic rules of society, both those embodied in the law and the law and in ethical custom.’ (Friedman 1970). However, in totality to the expected social responsibility, his argument misses out. In considering the stakeholders (employee and the owner), we draw to another context of three major ethical approaches. Immoral management, moral management and amoral management. Immoral management- making decisions or actions that have an active opposition to what’s deemed ethical. It cares only about profitability and success of the corporation. Such managers exploit opportunities for personal or corporate gain. Moral management- It employs ethical norms. Despite the fact that they target making profits, managers are conformed to legal and ethical precepts. No goal is above legal mandate. Amoral management- Such managers think ethical considerations are for private lives and not for business. They believe business activities reside outside the sphere to which moral judgments apply (Sethi, 1975:58-64). Evaluation The review of this article talks about the social responsibilities of corporate bodies based on a model explaining its components. The article is able to explain each component; legal, ethical, philanthropic and economical and by analyzing the ethical components it has raised three approaches towards management and by comparison, the moral approach has been deemed best. By doing so, we are able to come up with an appropriate system to govern organizational stakeholders. The central lesson of this article is that for a corporation to perform to its level best, it should provide a platform with a conducive environment that will allow effective communication and relation between employees in a corporation. For this to be realized, it needs to come up with the best management strategy and after comparisons, studies have shown corporations using the moral approach of management becoming successful. One of the strengths of the article is that it illustrates examples of corporations that have employed different management approaches based on the ethical component and the results obtained. One is thus able to draw lessons based on his/her judgment and decide what best approach to employ. The article is also able to clearly point out the distinctive parameters of the components of the model thus informative. The major weakness of this article is that the components are not mutually exclusive though they’re treated as different entities leading traditionalists to view this as a conflict between a firms ‘concern for society’ and its ‘concern for making profits. From a personal point, I am able to understand the reason and degree of participation by corporations towards creation and sustenance of social amenities in my community. The contributions they make and how they conduct their businesses is in a manner that ensures there’s profitability to everyone in society considering the aged and those with disabilities. Conclusion Though some time back amoral management was preferred because of its ethical neutrality, by comparison, the moral management approach is deemed best. This is because it ensures there’s maximum interaction amongst all entities in the corporation. It sets a conducive climate for improved ethical organizations in the firms. However, most entities fear that executives may think they’re providing good leadership by doing away with immoral management. Amoral management then will tend to encroach as most managers are unaware of its forms and the danger it poses to corporate bodies. The pyramid of corporate social responsibility gives us a deep understanding the nature of the performance of a firm in terms of economic, philanthropic, economic and legal parameters. Implementation of these responsibilities will depend on the firm’s size, management’s philosophy, the state of the economy amongst other factors. References Caroll, B. (1991). The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Business Horizons. Friedman, M. (1970). The Social Responsibility of Business is to Increase its Profits, The New York Times Magazine. Sethi, P. (1975). Dimensions of Corporate Social Responsibility, California Management Review, 17(3) pp. 58-64. Read More